Head Over Heels was financed and made by students of the National Film and Television School. Photograph: NFTS

Call it the Wallace & Gromit effect. A quirky British film called Head Over Heels could be about to upset the natural order in Hollywood and beat Disney to the coveted animation Oscar.

Just like A Grand Day Out, Nick Park's first, much-loved 1989 animation, Head Over Heels was made at the National Film and Television School (NFTS) and is now set to make a similar impact overseas. It is the only student film in contention for an Oscar next week.

Describing the animation, directed by Timothy Reckart and produced by Fodhla Cronin O'Reilly, as "one of those stand-out little gems that doesn't come around that often", Park said: "It's a cleverly conceived but simple idea. A clear and inventively told story, very poignant and full of heart. I'm not surprised they're winning awards with Head Over Heels. Much deserved."

The stakes are suddenly sky-high for the young film school graduates who put together the 11-minute animation on a tiny budget. So far, it is holding its own in the short animation category against the favourite – Disney's black-and-white offering, Paperman. While Disney has allegedly contravened strict Oscar rules by releasing Paperman in full online, the makers of Head Over Heels hit back by editing scenes from their film into the form of a viral Valentine email.

O'Reilly, who is already in California for next Sunday's ceremony, said: "People seem to really like it because the story itself is quite universal. That is why the film has had such a strong reaction." The plot revolves, quite literally, around a house where an emotionally distant married couple live together – but apart. Their tentative attempts to communicate are repeatedly thwarted as they continue to live according to different rules – one on the floor; one on the ceiling.

"I have had to pitch the story so often now, I find it hard to remember the effect it has," she said. "The meaning is very subjective, as it should be, but for me it is about realising what you already have. A couple can certainly start to take each other for granted and this is a romance about that." O'Reilly made the film with animator and director Reckart as their final project at film school. The two invited a group of fellow students to pitch in and bring Reckart's vision to life.

"The concept for the film came from Tim and we worked on it together," said the 26-year-old from Co Kerry. "We were in the same year and decided to make it the old-fashioned way, as a stop-motion animation with clay models."

Reckart has described the idea behind the story as "simple – a husband and wife separated by different fields of gravity". However, this does not stop the story from having a "really rich and emotional" depth. "Many married people have told me that the film rings true with their own experiences of marriage, and I think everyone, married or not, can identify with this story of love built upon sacrifice,'' he said. Reckart, who is also 26, grew up in Arizona and travelled to Britain to study at the NFTS in Buckinghamshire. "He came over here because he saw it as the home of animation. And it has been nice to think that the first Wallace & Gromit film was Nick Park's graduation film here too," said O'Reilly.

Park, who joined Bristol-based Aardman Animations, also earned an academy award nomination with A Grand Day Out, his graduate film, but actually won the Oscar that year, 1990, for Creature Comforts. Earlier this month in Los Angeles Head over Heels won an international Annie Award for animation. "We are funding the film ourselves, of course, and so we don't have the money to spend huge amounts on PR and publicity, but we are trying our hardest to spread the word," said O'Reilly.

Since leaving film school she has worked with Parallel Films in London and is involved in several new projects, including more animations with Reckart.

Among those who pitched in to help make Head Over Heels was 32-year-old film editor James Taylor from Plymouth, who will also attend the ceremony on Sunday. "Tim came up with such a simple but beautifully conceived metaphor that lies at the heart of Head Over Heels," Taylor has said.

His family and friends have raised money to fund his plane ticket and hotel room for Oscars night. "I'm so excited to be going to Hollywood to mix with people who have made the films I have been watching all my life," he said.

Head Over Heels is also up against Adam and Dog, a solo project from Disney animator Minkyu Lee, Fresh Guacamole, a film about making a dip out of inedible objects, and The Simpsons spin-off, The Longest Daycare, in which Maggie Simpson attends an Ayn Rand-inspired nursery. Head Over Heels remains an underdog, but since its powerful ending has been described as "one of the most romantic in cinema", perhaps Oscars night will end in the same uplifting way.